Confidence In Economy Continues To Grow

Prague, April 24 (CTK) – Confidence in Czech economy grew by 0.4 point to 100.1 points in April after March’s drop and was the highest since May 2008, business confidence increased, in particular in industry, while consumer confidence fell, the Czech Statistical Office (CSU) said today.

Compared with April 2017, the composite confidence indicator, as well as the business confidence and consumer confidence figures are higher.

Business confidence rose by 0.6 percent against March to 97.6 points.

“Industrial companies expect production activity to increase moderately in the coming three months even when lack of workforce is the main barrier to their further growth. At the moment, 35 percent of the respondents complain about this obstacle,” said Jiri Obst of the CSU.

Optimism of businesses was backed by still a good growth outlook for the economies of the Czech Republic’s main trading partners, said Komercni banka economist Viktor Zeisel.

“Concerns about trade wars, which would have large consequences for the open Czech economy, are getting lower as well,” he added.

In industry, the confidence indicator grew by 0.3 points to 97.1 point in April. For the next three months, respondents expect a slight rise in the development of production activity and a decrease in employment.

“Expectations of general economic situation development for the next three months are almost unchanged, for the next six months they increased,” the CSU said.

Against April 2017, confidence in industry is higher.

In construction, confidence did not change in April, it remained at 97.1 points. The assessment of total demand for construction work was almost the same as in March.

Confidence in trade did not change, it stayed at the same value of 100.6 points.

Consumer confidence indicator decreased slightly, by 0.3 point against March to 112.5 points but it is still high.

Consumers are for the next twelve months slightly more afraid of a drop in the overall economic situation in the coming 12 months. Worries about their financial standing are almost unchanged compared to March.

Worries about rise in unemployment were almost unchanged too. The share of respondents intending to save money was almost the same as in March as well.

Household consumption will be the main driving force of the Czech economy also this year, said Generali Investments CEE economist Radomir Jac.

The situation on the labour market, including wage growth, as well as low inflation will be favourable for household spending, he added.